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September 29, 2005
Case Study

Behind-the-Scenes Discoveries from HP's Email Segmentation Tests (Response Rates Up 300%-1000%)

SUMMARY: This spring HP's marketing department tested email segmentation, creating as many as 13 versions of a single email newsletter issue. Results were not as fabulous as expected. (Plus, content costs were fairly high.) So this summer they changed course. Their program name for the new tests was Target & Simplify. Although that name sounds as impossible as Push-me/Pull-you, results from 10 test campaigns so far range from 300%-1000%, higher than HP's past average. Discover how, plus see samples and data from three tests here.
CHALLENGE Most email marketers secretly yearn to do a lot more segmentation, sending out deeply personalized campaigns instead of one-size-fits-all creative to their file.

Alisa Marienthal, Marketing Manager HP Americas IMS Enterprise, lived the dream, testing sending different versions of HP's Technology at Work email newsletter to 13 segments of the house file. Segments included recipients in big vertical industries and employees at major HP clients.

The test worked. Response rates rose somewhat. But so did editorial costs. Marienthal wondered, was the test really generating as much ROI as it could?

How could HP get better response rates to offers to its house file without the extra costs associated with so much customized content?

CAMPAIGN Marienthal ruefully admits she wishes she'd asked end users what they wanted from email *before* she launched the segmentation tests. But better late than never.

HP held usability labs in both Denver and San Francisco to ask recipients to look over the emails. A variety of prospects from IT techies to business executives individually reviewed sample HP emails, while Marienthal's team watched from a mirrored window in the next room. Their three biggest lessons:

Lesson #1. Job responsibilities drive content interest far more than industry vertical or organization. People often identify more with their job title (i.e., "I'm a CIO") more than they do with their organization or its industry vertical. If you're going to segment, first try it by title.

Lesson #2. Most people will click on an offer to help them please their customer but their customer may not be the organization's target market. Example, a Systems Administrator for a large financial services firm said his customer was "The Mutual Funds Department, of course!" instead of mutual funds buyers.

Lesson #3. No recipient will ever examine your email as carefully as you do. Instead of reading, recipients tend to glance over email, skimming lightly for words or images that catch their eyes.

In reaction, Marienthal's team "collapsed" the segmented newsletters back down to about five versions that got the best response.

And, instead of investing more in newsletter creative, they decided to switch to segmented demand-generation campaigns. These were one-off offers marketing routinely broadcast independent of monthly newsletters.

To inspire themselves, they named the new email test program 'Target & Simplify.'

How can you be more targeted and more simplified at the same time? The team focused on three specific areas of improvement:

Area #1. Target and simplify copy

The team segmented their database for each offer based on what prospects' job functions and purchasing history implied. For example, for a campaign promoting HP color printers, the team segmented the list into three groups depending on what kind of printer those prospects already had.

Then, they pared copy from 100-200 words to as few as a dozen words. "If you know your customers really well, and you targeted things really well, you can find language that's going to hit the nail on the head," explains Marienthal.

Another example: the team divided software buyers into several groups for another campaign. One group were "innovators" who tended to buy the latest stuff, so the copy read, "We know you want your system to be the best it can be."

However, the group of 'laggards' who rarely upgraded software received a completely different message for the same offer, "You have a bandaged-type solution and may be losing cost efficiency."

Area #2. Simplify email response landing pages

If you're lucky enough to get a prospect to open and click, you shouldn't add barriers at the final response step. To that end, the team:

- Removed registration barriers completely for some white papers

- Pre-populated remaining registration forms with the clicker's info so they didn't have to retype data HP already had

- Deeplinked to just the right tech specs or downloads for each respondent based on what HP already knew about each one's existing systems

- Removed or streamlined extraneous navigation bars and clickable elements on landing pages that might distract from the purpose at hand

- Added highly relevant "hero shot" graphics to the particular offer (such as a white paper thumbnail) and/or to the particular audience demographic, instead of general graphics

Area #3. Simplify email opt-in forms

To increase opt-ins, HP's email team also tested dramatically slimming down their online registration forms. In one case, the registration form went from 175 words of copy plus 20 required fields and 12 white paper offers to just 15 words of copy plus six required fields and two white paper offers. (Link to sample below.)

After 10 test campaigns, "We're consistently seeing higher results almost irrespective of what the offer is," says Marienthal. "We've all been surprised by the consistency of results; when you run tests you expect to see a mixed bag. I can't overemphasize thoroughly enough the value of segmenting."

Response improvements range from 300%-1000% higher than HP's average email response rates in the past. (And the past campaigns didn't do that badly to start with.) See link below to three specific campaigns with more data.

Slimming down the email registration form had dramatic impact -- the conversion rate of visitors to registrants leapt from 2% to 31%.

Marienthal laughs, "My colleague here in marketing operations says we should put up a big sign reading 'SIMPLIFY!' on the wall."

Useful links related to this article

Creative samples related to HP's tests:

Ernan Roman Direct Marketing - a consultancy that helped HP with their targeted email marketing approach.


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